Asia Index launches BSE 1000, 4 other indices to tap emerging cos

In a bid to capture the growth potential of India’s emerging companies, Asia Index, a wholly owned subsidiary of BSE, launched five new indices, including BSE 1000, on Monday. The new indices – BSE 1000, BSE NEXT 500, BSE 250 MICROCAP, BSE Next 250 MICROCAP, and BSE 1000 MULTICAP EQUAL SIZE WEIGHTED (25%) - will offer market participants an opportunity to identify and capitalise on the next wave of high-performing companies.

“These indices are designed to capture the performance of a diverse range of companies, from large cap to micro-cap, providing a comprehensive coverageof India’s dynamic equity market,” Asia Index said in a release.

The BSE 1000 is India’s first stock Index will measure the performance of 1,000 of the largest and most liquid Indian companies within BSE AllCap. This index is ideal for asset managers to run passive strategies on and use it as relevant benchmark for active strategies. Also, for investors taking an exposure through exchange traded funds (ETFs), Index Funds or other active investments linked to the index, the release noted.

The BSE NEXT 500 index is intended to measure the performance of the 500 companies within BSE 1000 that are not a part of BSE 500, while the BSE 250 MICROCAP will gauge the performance of 250 of the largest and most liquid companies within BSE Next 500. While the BSE Next 250 MICROCAP will measure the performance of the 250 companies within BSE Next 500 that are not a part of BSE 250 MicroCap.

Meanwhile, the BSE 1000 MULTICAP EQUAL SIZE WEIGHTED Index comprises the constituents of BSE 100 LargeCap TMC, BSE 150 MidCap, BSE 250 SmallCap and BSE Next 500, equally weighted in the ratio 25:25:25:25 respectively.

Ashutosh Singh, MD and CEO of Asia Index, says the BSE 1000 represents over 93% of India’s overall market capitalisation and therefore will serve as a relevant benchmark for the overall stock market. “The index is designed to serve as a comprehensive barometer of India’s growing economy, reflecting the diversity and dynamism of our corporate sector, representing companies that are industry leaders and emerging businesses.”

Singh further says that as market participation expands, liquidity improves, and investor confidence strengthens on the back of progressive and investor oriented regulatory changes, the indices will offer an opportunity to market participants to follow the progress of India's stock market overall with a special lens on the emerging companies. “Historical trends and reclassification data consistently demonstrate that many of India’s established large caps and mid-caps once started out in the Next 500 grouping, reinforcing the opportunity within this segment.”

According to him, these indices will enable market participants to identify and capitalise on the next wave of high-performing companies. They also serve as valuable tools for passive investment strategies, such as ETFs and index funds, as well as for benchmarking portfolio performance.